International recession bites incomes, Rabobank/Federated Farmers Report shows

While the international recession has impacted growth of agricultural wages and salaries, the 2010 Federated Farmers/Rabobank Farm Employee Remuneration Report shows farm workers are still considerably better off than their urban counterparts.

“Agricultural wages and salaries seem to reflect the roller coaster year that employers have faced,” says Don Nicolson, President of Federated Farmers.

“Working on a farm remains a top-paying choice in what is truly, the world’s biggest industry. I’d seriously encourage anyone looking for a personally and professionally fulfilling career to go farming.

“At $48,388 per annum, the total package value (TPV) for the average farm worker was $5,227 more than the average personal (mean) annual wage and salary income[i]. Clearly you’re much better off on-farm than in a factory. More so as managerial positions paying north of $80,000 are available.

“Agricultural wages and salaries have kept touch with the prevailing rate of inflation, which has been 2 percent over the period we measure. But that said, the TPV did increase at twice that rate. I still feel that our workers have tightened their belts every bit as much as we have as employers.

“While domestic stimulus has definitely helped people ‘get through’ the recession, it’s done little for exporters. The opposite in fact, as we’ve faced a high dollar with increasing pressure on interest rates to rise sometime over 2010,” Mr Nicolson added.

Ben Russell, General Manager Rabobank New Zealand, agrees the international economic crisis has impacted rural wages and salaries.

“It’s been a very tough year for farm employers and that shows through in these wage increases,” says Mr Russell.

“The dairy sector, which arguably suffered the wildest fluctuations over the past year, saw wages and salaries increase by an average of 2.1 percent and 4.4 percent in respect of the TPV. This rate of wage and salary growth is only one-third of what it was in 2009.

“We’ve also seen a role reversal over the 2009 survey, as sheep and beef employees got increases twice the average recorded for their dairy counterparts. With an average increase of 4.4 percent for wages and salaries, it’s also double that recorded back in 2009. The TPV increase at 3.3 percent, however, was in line with last year’s survey.

“Yet it’s workers in the arable sector who have again recorded the highest average wage and salary growth of 8.1 percent, with a 10.3 percent increase in their TPV. The real pressures on arable employers has seen the rate of wage growth fall sharply over what it was in 2009.

“There has also been a fall in the level of remuneration being paid to casual farm labourers. Unskilled farm labourers saw their hourly rates fall by almost a dollar and, while they had a much smaller decline, even skilled casual workers saw a fall in hourly rates.

“This arguably reflects a sharp pruning of farm operating costs with employers moving resources to retain skilled permanent staff at the expense of casual staff,” Mr Russell concluded.

Federated Farmers felt policy uncertainty and a focus on debt reduction by employers would temper wage and salary growth for the foreseeable future. That said, agriculture provided a clear career path with senior positions on packages comparable to the professions. Given the future of New Zealand is the future of farming, both Rabobank and Federated Farmers believe the long term will be bright.

REPORT HIGHLIGHTS
· Average wages and salaries increased highest in the arable sector (up 8.1 percent), followed by sheep and beef (up 4.4 percent) and dairy (up 2.1 percent)
· Farm workers earned an average salary of $43,294 (up 3.3 percent in the year to October 2009). However, the average total package value (TPV) for farm workers (with salary and other benefits) was $48,388 (up 4.4 percent in the year to October 2009)
· This compares with the average personal (mean) annual wage and salary income, as recorded by the Statistics NZ Household Economic Survey (Income), being $43,161
· The TPV for the most senior positions averaged $80,265 (dairy), $72,099 (arable) and $63,613 (sheep/beef) and
· Casual skilled employees earned, on average, $19.80 per hour (down 1 percent) while unskilled casual staff earned $16.96 per hour (down 5 percent). Casual rates remain highest in the North Island.

OCCUPATIONS SURVEYED
Dairy Farm Assistant
Dairy Assistant Herd Manager
Dairy Herd Manager
Dairy Farm Manager
Dairy Farm Operations Manager
Sheep/Beef General Farmhand
Shepherd
Head Shepherd
Sheep Stock Manager
Sheep/Beef Farm Manager
Arable Tractor Driver
Arable Senior Tractor Driver
Arable Farm Manager

THE REPORT
The 2010 Federated Farmers/Rabobank Farm Employee Remuneration Report was produced from a comprehensive survey of members of Federated Farmers, conducted between August and October 2009. The categories used to identify on-farm roles in 2010 vary from previous years. In the 2010 survey, a new role, ‘Dairy Assistant Herd Manager,’ has been created and an old one, ‘Dairy Assistant Manager,’ discontinued. The Sheep/Beef ‘Operations Manager’ role has also been discontinued. Federated Farmers members will receive a copy of this report with the latest edition of the Federation’s National Farming Review. A downloadable version will be placed onto the members’ area of the Federation website but can be obtained by calling 0800 327 646. Non-members will be able to purchase the report after 12 February by visiting http://www.fedfarm.org.nz/ourshop or by calling 0800 327 646.